How many days must a lender disclose the reason for a loan denial?

How many days must a lender disclose the reason for a loan denial?

• A. 15 days
• B. 30 days
• C. 45 days
• D. 60 days

Answer: (B)

When a loan is denied, federal regulations require lenders to provide a notice of action taken, which includes the reason for the denial. According to the Equal Credit Opportunity Act (ECOA) and Regulation B, a lender must disclose the reason for the denial within 30 days from the date of the application. This period allows the borrower to understand the basis for the lender's decision, providing transparency in the lending process, and enabling the borrower to take necessary action or seek further information regarding their creditworthiness or the application itself. This requirement is in place to ensure fairness and help borrowers make informed decisions regarding future loan applications.

When a loan is denied, federal regulations require lenders to provide a notice of action taken, which includes the reason for the denial. According to the Equal Credit Opportunity Act (ECOA) and Regulation B, a lender must disclose the reason for the denial within 30 days from the date of the application. This period allows the borrower to understand the basis for the lender's decision, providing transparency in the lending process, and enabling the borrower to take necessary action or seek further information regarding their creditworthiness or the application itself. This requirement is in place to ensure fairness and help borrowers make informed decisions regarding future loan applications.